Facing growth slowdown, gold loan non-banking financial company (NBFC) Manapurram Finance plans to cut 1,000 jobs by the end of 2012-13. The company has already cut about 1,100 jobs since March. “We will further reduce the number of staff by 1,000 and will open only about 250 branches this year compared with about 1,000 last year,” said I Unnikrishan, Group's joint managing director.
The NBFC, which currently employees 17,939 people, is already reaping some cost benefits from reducing its staff. In the July-September quarter it paid R161 crore in salaries, which was about R7 crore less sequentially. Unnikrshnan did not comment on the savings which another round of job cuts will give to the company.
"We had reserved employees keeping in mind the growth projection. Since the growth has slowed, we are naturally reducing these staff," Unnikrshnan said.
Currently Manapurram has also frozen all its hiring plans.
Meanwhile, Muthoot Finance, which saw the headcount grow to 25,351 in 2011-12 from 3,102 in financial year 2006-07, has shown a dip of 494 staff members in its July-September quarter.
"The dip in staff this year has been due to the natural attrition in the company. Though we have also slowed down hiring in accordance with the growth projection for this year," said Oomen K Mammen, Muthoot Group's CFO.
Mammen said that since they are opening only about 200-300 branches in FY13 compared with 900 branches in FY12, they will first deploy the bench staff before hiring new ones.
Muthoot and Manapurram had clocked loan growth of 50-100% in last few years, but this year their projection has been lowered to 20%, after RBI showed concerns at the scorching pace at which loans-against-gold were growing.